Employment among 16-19 year-olds declined from about 41% in 2000 to 28% in 2013. Research regarding the possible negative effects of this is mixed: there is a significant literature on how working as a teenager affects later employment outcomes, but it is far from definitive. This dissertation builds a teenage labor market model and presents evidence regarding five different hypotheses for this decline in employment. These are: a reduction in the supply of teenage labor stemming from increased returns to education; decreased demand for teenage labor due to increased competition from immigrants; decreased demand for teenage labor due to increased competition from less-skilled workers; decreased demand for teenage labor due to increased competition from adult workers in general; and minimum wages that are increasingly binding. I find mixed evidence, with the strongest evidence in favor of lower supply due to higher returns to education. There is also evidence that demand for teenage labor has fallen, with a small amount of evidence specifically supporting the hypothesis that adult immigrants are increasingly competing with teenagers.
Because the evidence for the importance of working as a teenager on later employment outcomes and contribution to family finances is weak, public policy should not focus on getting teenagers in general to work. Instead, youth employment programs should focus specifically on the subset of teenagers who are disengaged from work and school. These teenagers differ in a variety of ways from their more-engaged peers. Among existing programs, there is significant variance in both degree of targeting and the extent to which program evaluation is occurring. The low-hanging fruit in terms of policy improvement is better evaluation of existing youth employment programs, with results informing funding.
Table of Contents
Modeling Teenage Employment
Teenagers and Education
Teenage Jobs: What Happened to Them, Who is Working Them?
Teenage Labor Market Issues
Adjudicating Between Explanations
Policy Implications and Recommendations
Information on Variables Used
Deriving Hourly Wage and Alternative Specifications
Data Sets Used
Literature on the Effects of Teenage Employment